Case Law Details
Sudhan Chandra Basak Vs Union of India (Allahabad High Court)
This application is filed on basis of some undisputed facts that orders of penalty were passed against applicant under Sections 271(1)(a), 271(1)(c) and 273(b) of Income Tax Act for late filing of return for Assessment Year 1983-84. These orders were challenged by way of three separate appeals and Appellate Authority vide separate orders dated 19.06.1989 cancelled the penalty and allowed all appeals. However, the criminal proceedings under Section 276-C of Income Tax Act initiated simultaneously remained in existence.
Supreme Court in K.C. Builders and anothers vs. Assistant Commissioner of Income Tax (2004) 2 SCC 731 where in similar circumstances Court has held as under:
“24. In the instant case, the penalties levied under Section 271(1)(c) were cancelled by the respondent by giving effect to the order of the Income Tax Appellate Tribunal in I.T.A. Nos. 3129-3132. It is settled law that levy of penalties and prosecution under Section 276C are simultaneous. Hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276C is automatic.
25.In our opinion, the appellants cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the Appellate Tribunal supersedes the order of the Assessing Officer under Section 143(3) more so when the Assessing Officer cancelled the penalty levied.”
Present case are squarely covered by the judgment in K.C. Builders (supra) and the above ratio will also cover the position of law with regard to criminal proceedings arising out of orders of penalty. In view of above, the application is allowed.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Prakhar Saran Srivastava, learned counsel for applicant and Sri Krishna Agarwal, Advocate for Opposite Party.
2. This application is filed on basis of some undisputed facts that orders of penalty were passed against applicant under Sections 271(1)(a), 271(1)(c) and 273(b) of Income Tax Act for late filing of return for Assessment Year 1983-84. These orders were challenged by way of three separate appeals and Appellate Authority vide separate orders dated 19.06.1989 cancelled the penalty and allowed all appeals. However, the criminal proceedings under Section 276-C of Income Tax Act initiated simultaneously remained in existence.
3. Learned counsel for applicant contended that said criminal proceedings were challenged before this Court by way of filing Application under Section 482 No. 13277 of 1992 wherein interim orders were passed and finally it was allowed by order dated 24.08.2004. Inadvertently applicant has not procured certified copy of said order and since it was not placed before Trial Court, criminal proceedings continued against applicant. In these circumstances, applicant approached this Court in the year 2015 by way of filing present application.
4. Various orders were passed by this Court to trace the record of Application under Section 482 No. 13277 of 1992 and order passed in said application, however, report is submitted that record was sent back to Court concerned but there is no receipt at Court concerned. Some of the documents have been placed along with report that interim order was passed as well as the dispatch register shows that record was sent back. In one of the document it is shown that application was allowed.
5. Be that as it may, since applicant has approached this Court by fairly submitting that earlier an application was filed, the Court proceed to pass order on merit.
6. Learned counsel for applicant placed reliance on a judgment passed by Supreme Court in K.C. Builders and anothers vs. Assistant Commissioner of Income Tax (2004) 2 SCC 731 where in similar circumstances Court has held as under:
“24. In the instant case, the penalties levied under Section 271(1)(c) were cancelled by the respondent by giving effect to the order of the Income Tax Appellate Tribunal in I.T.A. Nos. 3129-3132. It is settled law that levy of penalties and prosecution under Section 276C are simultaneous. Hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276C is automatic.
25. In our opinion, the appellants cannot be made to suffer and face the rigorous of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the Appellate Tribunal supersedes the order of the Assessing Officer under Section 143(3) more so when the Assessing Officer cancelled the penalty levied.”
7. Learned counsel appearing for Opposite Party has not disputed the facts except that in earlier application criminal proceedings were quashed, due to want of knowledge. However, he is not able to refute the reliance placed by learned counsel for applicant on K.C. Builders (supra).
8. In these circumstances I am of the view that facts of the present case are squarely covered by the judgment in K.C. Builders (supra) and the above ratio will also cover the position of law with regard to criminal proceedings arising out of orders of penalty.
9. In view of above, the application is allowed. The orders dated 01.07.2013, 31.03.2015 passed by Special Chief Judicial Magistrate, Varanasi and order dated 08.04.2015 passed by Sessions Judge, Varanasi as well as proceedings in Case No. 1677/1997 (Union of India vs. Sudhan Chandra Basak) under Sections 276, 277 of Income Tax Act, are hereby quashed.
10. In view of above order, the report submitted by Registrar (J) Criminal considered and accepted with no further orders.
